Federal Register / Vol. 75, No. 83 / Friday, April 30, 2010 / Notices 22847 

protection afforded the miners of such 

mine by such standard; or (2) that the 

application of such standard to such 

mine will result in a diminution of 

safety to the miners in such mine. In 

addition, the regulations at 30 CFR 

44.10 and 44.11 establish the 

requirements and procedures for filing 

petitions for modification. 

II. Petition for Modification 

Docket No: M–2010–017–C. 

Petitioner: Brooks Run Mining 

Company, LLC, 208 Business Street, 

Beckley, West Virginia 25801. 

Mine: Horse Creek No. 1 Mine, MSHA 

I.D. No. 46–09348, located in McDowell 

County, West Virginia. 

Regulation Affected: 30 CFR 75.1101– 

1(b) (Deluge-type water spray systems). 

Modification Request: The petitioner 

proposes as an alternative method that 

in lieu of providing nozzles for blow-off 

dust covers, weekly inspection and 

functional testing of the complete 

deluge-type water spray system will be 

continued and blow-off dust covers will 

be removed from the nozzles. The 

petitioner states that: (1) Weekly 

inspection and functional tests are 

conducted of its complete deluge-type 

water spray system; (2) each nozzle is 

provided with a blow-off dust cover; (3) 

in view of the frequent inspections and 

functional testing of the system, the dust 

covers are not necessary because the 

nozzles can be maintained in an 

unclogged condition through weekly 

use; and (4) it is burdensome to recap 

the large number of covers weekly after 

each inspection and functional test. The 

petitioner asserts that the proposed 

alternative method will at all times 

guarantee no less than the same measure 

of protection afforded the miners as the 

existing standard. 

Patricia W. Silvey, 

Director, Office of Standards, Regulations and 

Variances. 

[FR Doc. 2010–10109 Filed 4–29–10; 8:45 am] 

BILLING CODE 4510–43–P 

DEPARTMENT OF LABOR 

Employee Benefits Security 

Administration 

Prohibited Transaction Exemptions 

and Grant of Individual Exemptions 

Involving: 2010–13, Putnam Fiduciary 

Trust Company, D–11425; 2010–14, 

UBS Financial Services Inc. and its 

Affiliates (UBS), D–11502; and 2010– 

15, Subaru of America, Inc. (Subaru), 

D–11531 

AGENCY: Employee Benefits Security 

Administration, Labor. 

ACTION: Grant of Individual Exemptions. 

SUMMARY: This document contains 

exemptions issued by the Department of 

Labor (the Department) from certain of 

the prohibited transaction restrictions of 

the Employee Retirement Income 

Security Act of 1974 (ERISA or the Act) 

and/or the Internal Revenue Code of 

1986 (the Code). 

A notice was published in the Federal 

Register of the pendency before the 

Department of a proposal to grant such 

exemption. The notice set forth a 

summary of facts and representations 

contained in the application for 

exemption and referred interested 

persons to the application for a 

complete statement of the facts and 

representations. The application has 

been available for public inspection at 

the Department in Washington, DC. The 

notice also invited interested persons to 

submit comments on the requested 

exemption to the Department. In 

addition the notice stated that any 

interested person might submit a 

written request that a public hearing be 

held (where appropriate). The applicant 

has represented that it has complied 

with the requirements of the notification 

to interested persons. No requests for a 

hearing were received by the 

Department. Public comments were 

received by the Department as described 

in the granted exemption. 

The notice of proposed exemption 

was issued and the exemption is being 

granted solely by the Department 

because, effective December 31, 1978, 

section 102 of Reorganization Plan No. 

4 of 1978, 5 U.S.C. App. 1 (1996), 

transferred the authority of the Secretary 

of the Treasury to issue exemptions of 

the type proposed to the Secretary of 

Labor. 

Statutory Findings 

In accordance with section 408(a) of 

the Act and/or section 4975(c)(2) of the 

Code and the procedures set forth in 29 

CFR Part 2570, Subpart B (55 FR 32836, 

32847, August 10, 1990) and based upon 

the entire record, the Department makes 

the following findings: 

(a) The exemption is administratively 

feasible; 

(b) The exemption is in the interests 

of the plan and its participants and 

beneficiaries; and 

(c) The exemption is protective of the 

rights of the participants and 

beneficiaries of the plan. 

Putnam Fiduciary Trust Company 

(PFTC), Located in Boston, 

Massachusetts. 

[Prohibited Transaction Exemption 

2010–13; Exemption Application No. 

D–11425.] 

Exemption 

Section I—Exemption 

Effective as of January 19, 2010, the 

restrictions of section 406(a) and (b) of 

the Act, and the taxes imposed by 

section 4975(a) and (b) of the Code, by 

reason of section 4975(c)(1)(A) through 

(F) of the Code, shall not apply to either 

(a) the purchase or sale by a Collective 

Fund (as defined in Section III(b) below) 

of shares of a Mutual Fund (as defined 

in Section III(d) below) where Putnam 

Fiduciary Trust Company (‘‘PFTC’’ or 

the ‘‘Applicant’’) or its affiliate (PFTC 

and its affiliates are referred to herein as 

‘‘Putnam’’) is the investment advisor of 

the Mutual Fund as well as a fiduciary 

with respect to the Collective Fund (or 

an affiliate of such fiduciary) or (b) the 

receipt of fees by Putnam from a Mutual 

Fund for acting as an investment 

advisor for the Mutual Fund and/or for 

providing other services to the Mutual 

Fund which are Secondary Services (as 

defined in Section III(g) below) in 

connection with the investment by the 

Collective Fund in shares of the Mutual 

Fund, provided that the following 

conditions and the general conditions of 

Section II are met: 

(a) Each Collective Fund satisfies 

either (but not both) of the following: 

(1) The Collective Fund receives a 

cash credit equal to such Collective 

Fund’s proportionate share of all fees 

charged to the Mutual Fund by Putnam 

for investment advisory services. Such 

credit shall be paid to the Collective 

Fund no later than the same day on 

which such investment advisory fees are 

paid to Putnam. The crediting of all 

such fees to the Collective Funds by 

Putnam is audited by an independent 

accounting firm on at least an annual 

basis to verify the proper crediting of 

the fees to each Collective Fund. The 

audit report shall be completed not later 

than six months after the period to 

which it relates; or 

(2) No management fees, investment 

advisory fees, or similar fees are paid to 

Putnam with respect to any of the assets 

of such Collective Fund that are 

invested in shares of the Mutual Fund. 

This condition does not preclude the 

payment of investment advisory or 

similar fees by the Mutual Fund to 

Putnam under the terms of an 

investment management agreement 

adopted in accordance with section 15 

of the Investment Company Act of 1940 

(the 1940 Act), nor does it preclude the 

payment of fees for Secondary Services 

to Putnam pursuant to a duly adopted 

agreement between Putnam and the 

Mutual Fund if the conditions of this 

exemption are otherwise met. 


wwoods2 on DSK1DXX6B1PROD with NOTICES_PART 1
22848 Federal Register / Vol. 75, No. 83 / Friday, April 30, 2010 / Notices 

1The selection of a particular class of shares of 

a Mutual Fund as an investment for a Collective 

Fund is a fiduciary decision that must be made in 

accordance with the provisions of section 404(a) of 

the Act. In this exemption, the Department is not 

addressing any issues under section 404 or 406 of 

the Act resulting from the selection of one class of 

shares of a Mutual Fund over another class of 

shares (e.g., where there may be higher fees or 

prices associated with one or more of the classes of 

shares). Consistent with the above duties, the 

Applicant has represented that the Collective Fund 

will invest in the lowest priced class of shares in 

the Mutual Fund. 

(b) The price paid or received by a 

Collective Fund for shares in the Mutual 

Fund is the net asset value (NAV) per 

share (as defined in Section III(h)) and 

is the same price that would have been 

paid or received for the shares by any 

other investor in the Mutual Fund at 

that time, and all other dealings 

between the Collective Funds and the 

Mutual Fund will be on a basis no less 

favorable to the Collective Fund than 

such dealings will be with the other 

shareholders of the same class of shares 

of the Mutual Fund.1

(c) Putnam, including any officer or 

director of Putnam, does not purchase 

or sell shares of the Mutual Fund from 

or to any Collective Fund; provided that 

this condition shall not preclude the 

purchase or redemption of such shares 

between a Collective Fund and an 

affiliate of PFTC acting solely in its 

capacity as underwriter for the Mutual 

Fund, if such affiliate acts as a riskless 

principal, the purchase or redemption is 

at NAV at the time of the transaction, 

and the affiliate does not receive any 

direct or indirect compensation, spread 

or other consideration in connection 

with such purchase or redemption. 

(d) No sales commissions, redemption 

fees, or other similar fees are paid by the 

Collective Funds in connection with the 

purchase or sale of shares of the Mutual 

Fund. 

(e) For each Collective Fund, the 

combined total of all fees received by 

Putnam for the provision of services to 

the Collective Fund, and in connection 

with the provision of services to the 

Mutual Fund in which the Collective 

Fund may invest, are not in excess of 

‘‘reasonable compensation’’ within the 

meaning of section 408(b)(2) of the Act. 

(f) Putnam does not receive any fees 

payable pursuant to Rule 12b–1 under 

the 1940 Act in connection with the 

transactions covered by this exemption. 

(g) The Second Fiduciary (as defined 

in Section III (f) below) with respect to 

each plan having an interest in a 

Collective Fund (a ‘‘Client Plan’’) 

receives in writing, in advance of any 

investment by the Collective Fund in 

the Mutual Fund, full and detailed 

disclosure of information concerning 

the Mutual Fund, including but not 

limited to: (1) A current prospectus 

issued by the Mutual Fund; (2) a 

statement describing the fees for 

investment advisory or similar services, 

any Secondary Services and all other 

fees to be charged to or paid by (or with 

respect to) the Collective Fund and by 

the Mutual Fund, including the nature 

and extent of any differential between 

the rates of such fees; (3) the reasons 

why PFTC may consider such 

investment to be appropriate for the 

Collective Fund; (4) a statement 

describing whether there are any 

limitations applicable to PFTC with 

respect to which Collective Fund assets 

may be invested in shares of the Mutual 

Fund and, if so, the nature of such 

limitations; and (5) upon request of the 

Second Fiduciary, a copy of both the 

notice of proposed exemption and a 

copy of the final exemption, and any 

other reasonably available information 

regarding the transactions covered by 

this exemption. 

(h) On the basis of the information 

described in paragraph (g) above, the 

Second Fiduciary authorizes in writing 

the investment of assets of the 

Collective Fund in the Mutual Fund and 

the fees to be paid by the Mutual Fund 

to Putnam. 

(i) Except as otherwise indicated in 

this paragraph (i), on an annual basis, 

Putnam will provide to the Second 

Fiduciary of each Client Plan having an 

interest in the Collective Fund: (1) a 

current prospectus issued by the Mutual 

Fund in which the Collective Fund 

invests, and, upon the Second 

Fiduciary’s request, a copy of the 

Statement of Additional Information for 

such Mutual Fund that contains a 

description of all fees paid by the 

Mutual Fund to Putnam; (2) a copy of 

the annual financial disclosure report 

prepared by Putnam that includes 

information about the Mutual Fund 

portfolios, as well as audit findings of 

an independent auditor, within 60 days 

of the preparation of the report; (3) oral 

or written responses to inquiries of the 

Second Fiduciary as they arise; (4) a 

statement (i) of the approximate 

percentage (which may be in the form 

of a range) of the assets of the Collective 

Fund that were invested in the Mutual 

Fund during the year and (ii) that, if the 

Second Fiduciary objects to the 

continued investment by the Collective 

Fund in the Mutual Fund, the Client 

Plan may withdraw from the Collective 

Fund; and (5) a form (Termination 

Form) expressly providing an election to 

withdraw from the Collective Fund, 

together with instructions on the use of 

such form. The instructions will inform 

the Second Fiduciary that: (i) The prior 

written authorization is terminable at 

will by the Plan, without penalty to the 

Plan, upon receipt by Putnam of written 

notice from the Second Fiduciary, and 

(ii) failure to return the form will result 

in continued authorization for Putnam 

to engage in the transactions described 

above on behalf of the Plan. 

However, if the Termination Form has 

been provided to the Second Fiduciary 

pursuant to Section I(j), the Termination 

Form need not be provided again for an 

annual reauthorization pursuant to this 

Section I(i) unless at least six months 

has elapsed since the form was 

previously provided. 

(j) Except as provided in Section 

I(j)(E), paragraph (h) of this Section I 

does not apply if: 

(A) The purchase, holding and sale of 

Mutual Fund shares by the Collective 

Fund is performed subject to the prior 

and continuing authorization, in the 

manner described in this paragraph (j), 

of a Second Fiduciary with respect to 

each Client Plan whose assets are 

invested in the Collective Fund. 

(B) (1) For each Collective Fund using 

the fee structure described in paragraph 

(a)(2) above with respect to investments 

in the Mutual Fund, in the event of an 

increase in the rate of fees paid by the 

Mutual Fund to Putnam regarding any 

investment management services, 

investment advisory services, or similar 

services that Putnam provides to the 

Mutual Fund over an existing rate for 

such services that had been authorized 

by a Second Fiduciary in accordance 

with paragraph (h) above or this 

paragraph (j); or 

(2) For each Collective Fund under 

this exemption (regardless of whether 

the fee structure described in paragraph 

(a)(1) or (a)(2) is used), in the event an 

additional Secondary Service is 

provided by Putnam to the Mutual Fund 

for which a fee is charged, or an 

increase in the rate of any fee paid by 

the Mutual Fund to Putnam for any 

Secondary Service that results either 

from an increase in the rate of such fee 

or from a decrease in the number or 

kind of services performed by Putnam 

for such fee over an existing rate for 

such Secondary Service that had been 

authorized by a Second Fiduciary in 

accordance with paragraph (h) above or 

this paragraph (j): 

Putnam will, at least 30 days in 

advance of the implementation of any 

direct or indirect increase in fees 

described in this paragraph (j), provide 

a written notice (which may take the 

form of a letter or similar 

communication that is separate from the 

prospectus of the Fund and that 

explains the nature and amount of the 

additional service for which a fee is 


wwoods2 on DSK1DXX6B1PROD with NOTICES_PART 1
Federal Register / Vol. 75, No. 83 / Friday, April 30, 2010 / Notices 22849 

2Putnam will pay interest on any such amounts 

from the date it receives such incremental amounts 

to the date it makes the rebate payment to the 

Collective Fund. 

charged or of the increase in the rate of 

fee) to the Second Fiduciary of each 

Client Plan having an interest in the 

Collective Fund. Such written notice 

will include a Termination Form 

expressly providing an election to 

withdraw from the Collective Fund, 

together with instructions on the use of 

such form. 

(C) In the event a Second Fiduciary 

submits a notice in writing to PFTC 

objecting to the initial investment by the 

Collective Fund in the Mutual Fund or 

the implementation of such additional 

service for which a fee is charged or 

such rate of fee increase, whichever is 

applicable, the Client Plan on whose 

behalf the objection was intended is 

given the opportunity to terminate its 

investment in the Collective Fund, 

without penalty to such Client Plan, 

within such time as may be necessary to 

effect the withdrawal in an orderly 

manner that is equitable to all 

withdrawing Client Plans and to the 

non-withdrawing Client Plans. In the 

case of a Client Plan that elects to 

withdraw under this subparagraph (C), 

the withdrawal shall be effected prior to 

the initial investment by the Collective 

Fund in the Mutual Fund or the 

implementation of such additional 

service for which a fee is charged or 

such rate of fee increase, whichever is 

applicable. 

(D) Notwithstanding the foregoing 

subparagraphs (B) and (C), Putnam may 

commence providing an additional 

Secondary Service for a fee or 

implement any increase in the rate of 

fee paid by the Mutual Fund to Putnam 

prior to providing the notice referred to 

in subparagraph (B) above or prior to the 

withdrawal of an objecting Client Plan, 

whichever is applicable, provided that, 

in either such event, the Collective 

Fund receives a cash credit equal to the 

Collective Fund’s proportionate share of 

the fee for the additional Secondary 

Service or such fee increase charged to 

the Mutual Fund by Putnam, whichever 

is applicable, for the period from the 

date of such commencement or 

implementation to the later of the date 

that is 30 days after the notice referred 

to in subparagraph (B) above has been 

provided or, if applicable, the date on 

which any Client Plan that objects to the 

provision of such additional Secondary 

Service or to such fee increase has 

withdrawn from the Collective Fund 

pursuant to subparagraph (C) above. 

Any such cash credits shall be paid to 

the Collective Fund, with interest 

thereon at the prevailing Federal funds 

rate plus two percent (2%), no later than 

the fifth business day following the 

receipt of the increased fee by Putnam.2

The crediting of all such fees to the 

Collective Fund by Putnam will be 

audited by an independent accounting 

firm on at least an annual basis to verify 

the proper crediting of the fees and 

interest to the Collective Fund. The 

audit report shall be completed not later 

than six months after the period to 

which it relates. 

(E) In the case of a Client Plan whose 

assets are proposed to be invested in the 

Collective Fund subsequent to the 

implementation of the arrangement and 

that has not authorized the investment 

of assets of the Collective Fund in the 

Mutual Fund, the Client Plan’s 

investment in the Collective Fund is 

subject to: (1) The receipt by a Second 

Fiduciary of the full and detailed 

disclosures concerning the Mutual Fund 

pursuant to Section I(g), above, and (2) 

the prior written authorization of a 

Second Fiduciary pursuant to Section 

I(h), above (i.e., the authorization must 

be provided by such new Client Plan 

investor in advance of the initial 

investment). 

(k) For each Collective Fund using the 

fee structure described in paragraph 

(a)(1) above with respect to investments 

in the Mutual Fund, the Second 

Fiduciary of the Client Plan receives full 

written disclosure in a Fund prospectus 

or otherwise of any increases in the 

rates of fees charged by Putnam to the 

Mutual Fund for investment advisory 

services, or of a decrease in the number 

or kind of services performed by 

Putnam. 

Section II—General Conditions 

(a) PFTC maintains for a period of six 

years the records necessary to enable the 

persons described in paragraph (b) 

below to determine whether the 

conditions of this exemption have been 

met, except that: 

(1) A separate prohibited transaction 

will not be considered to have occurred 

if, solely because of circumstances 

beyond the control of PFTC, the records 

are lost or destroyed prior to the end of 

the six-year period; and 

(2) No party in interest other than 

Putnam shall be subject to the civil 

penalty that may be assessed under 

Section 502(i) of the Act or to the taxes 

imposed by Section 4975(a) and (b) of 

the Code, if the records are not 

maintained or are not available for 

examination as required by paragraph 

(b) below. 

(b)(1) Except as provided in paragraph 

(b)(2) below and notwithstanding any 

provisions of Section 504(a)(2) of the 

Act, the records referred to in paragraph 

(a) above are unconditionally available 

at their customary location for 

examination during normal business 

hours by: 

(i) Any duly authorized employee or 

representative of the Department, the 

Internal Revenue Service, or the 

Securities & Exchange Commission, 

(ii) Any fiduciary of a Client Plan who 

has authority to acquire or dispose of 

the interest in the Collective Fund 

owned by such Client Plan, or any duly 

authorized employee or representative 

of such fiduciary, and 

(iii) Any participant or beneficiary of 

a Client Plan having an interest in the 

Collective Fund or duly authorized 

employee or representative of such 

participant or beneficiary. 

(2) None of the persons described in 

paragraph (b)(1)(ii) or (iii) above shall be 

authorized to examine trade secrets of 

Putnam, or commercial or financial 

information that is privileged or 

confidential. 

Section III—Definitions 

(a) An ‘‘affiliate’’ of a person includes: 

(1) Any person directly or indirectly 

through one or more intermediaries, 

controlling, controlled by, or under 

common control with the person; 

(2) Any officer, director, employee, 

relative, or partner in any such person; 

and 

(3) Any corporation or partnership of 

which such person is an officer, 

director, partner, or employee. 

(b) The term ‘‘Collective Fund’’ means 

any common or collective trust fund 

maintained by PFTC. 

(c) The term ‘‘control’’ means the 

power to exercise a controlling 

influence over the management or 

policies of a person other than an 

individual. 

(d) The term ‘‘Mutual Fund’’ means 

the Putnam Money Market Liquidity 

Fund and any other money market fund 

that is a diversified open-end 

investment company registered under 

the 1940 Act and operated in 

accordance with Rule 2a–7 under the 

1940 Act as to which Putnam serves as 

an investment adviser. Putnam may also 

serve as a custodian, dividend 

disbursing agent, shareholder servicing 

agent, transfer agent, fund accountant, 

or provider of some other ‘‘Secondary 

Service’’ (as defined below in paragraph 

(g) below). 

(e) The term ‘‘relative’’ means a 

‘‘relative’’ as that term is defined in 

section 3(15) of the Act (or a ‘‘member 

of the family’’) as that term is defined in 

section 4975(e)(6) of the Code), or a 


wwoods2 on DSK1DXX6B1PROD with NOTICES_PART 1
22850 Federal Register / Vol. 75, No. 83 / Friday, April 30, 2010 / Notices 

3For purposes of this exemption, references to 

section 406 of the Act should be read to refer as 

well to the corresponding provisions of section 

4975 of the Code. 

brother, a sister, or a spouse of a brother 

or a sister. 

(f) The term ‘‘Second Fiduciary’’ 

means a fiduciary of a Client Plan who 

is independent of, and unrelated to, 

Putnam. For purposes of this 

exemption, the Second Fiduciary will 

not be deemed to be independent of and 

unrelated to Putnam if: 

(1) Such fiduciary directly or 

indirectly controls, is controlled by, or 

is under common control with Putnam; 

(2) Such fiduciary, or any officer, 

director, partner, employee, or relative 

of the fiduciary is an officer, director, 

partner or employee of Putnam (or is a 

relative of such persons); or 

(3) Such fiduciary directly or 

indirectly receives any compensation or 

other consideration for his or her own 

personal account in connection with 

any transaction described in this 

exemption. 

If an officer, director, partner or 

employee of Putnam (or a relative of 

such a person), is a director of such 

Second Fiduciary, and if he or she 

abstains from participation in (i) the 

decision of the Client Plan to invest in, 

and remain invested in, the Collective 

Fund and (ii) the granting of any 

authorization contemplated by Section 

I(h) or any deemed authorization 

contemplated by Section I(i) and (j) with 

respect to the Collective Fund, then 

paragraph (f)(2) above shall not apply. 

(g) The term ‘‘Secondary Service’’ 

means a service other than an 

investment management, investment 

advisory, or similar service, which is 

provided by Putnam to the Mutual 

Fund, including but not limited to 

custodial, accounting, administrative, or 

any other service. 

(h) The term ‘‘net asset value (i.e., 

NAV)’’ means the amount for purposes 

of pricing all purchases and sales, 

calculated by dividing the value of all 

securities, determined by a method as 

set forth in a Mutual Fund’s prospectus 

and statement of additional information, 

and other assets belonging to the Mutual 

Fund or portfolio of the Mutual Fund, 

less the liabilities charged to each such 

portfolio or Mutual Fund, by the 

number of outstanding shares. 

For a more complete statement of the 

facts and representations supporting the 

Department’s decision to grant this 

exemption, refer to the notice of 

proposed exemption published on 

January 19, 2010 at 75 FR 3054. 

Written Comments and Hearing 

Requests 

The Department received one written 

comment letter in response to the notice 

of proposed exemption, which was 

submitted by the Applicant. There were 

no requests for a hearing. 

In its comment letter, the Applicant 

requested that the Department make 

three changes to the operative language 

of the proposed exemption. First, the 

Applicant asked the Department to 

revise section I(b) in order to reflect the 

possibility that a Mutual Fund might 

have more than one class of shares. The 

Department has made the requested 

change by adding the words, ‘‘of the 

same class of shares’’ to the condition. 

The Applicant also suggested that the 

Department clarify the language of 

section I(j)(B)(2), and agreed with the 

Department’s re-wording of the 

condition which requires that Putnam 

will, at least 30 days in advance of the 

implementation of any direct or indirect 

increase in fees described in paragraph 

(j), provide a written notice to the 

Second Fiduciary of each Client Plan 

having an interest in the Collective 

Fund. Third, the Applicant asked the 

Department to revise section III(d) to 

reflect the fact that the Putnam Prime 

Money Market Fund is no longer in 

existence. 

In addition, the Applicant provided 

the following changes and updated 

information for the ‘‘Summary of Facts 

and Representations’’ (the Summary) 

section of the proposed exemption: 

(1) PFTC became a New Hampshire 

(not Massachusetts) trust company on 

April 3, 2009 and, as such, is subject to 

supervision by the New Hampshire 

Banking Department; 

(2) As a result of an internal corporate 

reorganization, which occurred on 

August 3, 2007, PFTC is now a whollyowned subsidiary of Putnam U.S. 

Holdings, LLC (not of Putnam, LLC). 

Accordingly, all references to Putnam, 

LLC should be read to mean Putnam 

U.S. Holdings, LLC; 

(3) Putnam U.S. Holdings, LLC has 

been an indirect majority-owned 

subsidiary of Great-West Lifeco U.S. Inc. 

at all times since Great-West Lifeco U.S. 

Inc. acquired Putnam on August 3, 

2007; 

(4) In paragraph 2 of the Summary, 

the word ‘‘2006’’ should be deleted; 

(5) Paragraph 5 of the Summary refers 

to the Putnam Prime Money Market 

Fund. As noted above, this fund was 

terminated subsequent to the filing of 

the exemption application. The 

successor to this fund is the Putnam 

Money Market Liquidity Fund, which 

was established in 2009. As a result of 

the foregoing, the reference in the first 

sentence of paragraph 5 of the Summary 

should be changed from Putnam Prime 

Money Market Fund to Putnam Money 

Market Liquidity Fund. The third 

sentence of paragraph 5 of the Summary 

should be revised to state that, ‘‘The 

Applicant represents that since January 

2006, the yields generated by the 

institutional money market funds 

managed by Putnam have generally 

been superior to the yield generated by 

the STIF’’; and 

(6) In paragraph 19 of the Summary, 

the reference to other shareholders 

should be to other shareholders ‘‘of the 

same class of shares’’ of the Mutual 

Fund. 

The Department has given full 

consideration to the entire record, 

including the comment letter received. 

The Department has determined to grant 

the exemption, with the changes as 

noted above. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Gary H. Lefkowitz of the Department, 

telephone (202) 693–8546. (This is not 

a toll-free number.) 

UBS Financial Services Inc. and Its 

Affiliates (UBS), Located in 

Weehawken, New Jersey. 

[Prohibited Transaction Exemption 

2010–14; Exemption Application No. 

D–11502.] 

Exemption 

Section I. Transactions Involving Plans 

Described in Both Title I and Title II of 

ERISA 

The restrictions of sections 

406(a)(1)(A) through (D) and section 

406(b) of the Act, and the taxes imposed 

by sections 4975(a) and (b) of the Code, 

by reason of section 4975(c)(1) of the 

Code, shall not apply, effective February 

1, 2008, to the following transactions, if 

the conditions set forth in Section III 

have been met: 3

(a) The sale or exchange of an Auction 

Rate Security (as defined in Section 

IV(b)) by a Plan (as defined in Section 

IV(h)) to the Sponsor (as defined in 

Section IV(g)) of such Plan; or 

(b) A lending of money or other 

extension of credit to a Plan in 

connection with the holding of an 

Auction Rate Security by the Plan, from: 

(1) UBS; (2) an Introducing Broker (as 

defined in Section IV(f)); or (3) a 

Clearing Broker (as defined in Section 

IV(d)); where the loan is: (i) repaid in 

accordance with its terms; and (ii) 

guaranteed by the Sponsor. 

Section II. Transactions Involving Plans 

Described in Title II of ERISA Only 

The sanctions resulting from the 

application of sections 4975(a) and (b) 

of the Code, by reason of section 

4975(c)(1) of the Code, shall not apply, 


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Federal Register / Vol. 75, No. 83 / Friday, April 30, 2010 / Notices 22851 

4This exemption does not address tax issues. The 

Department has been informed by the Internal 

Revenue Service (the Service) and the Department 

of the Treasury that they are considering providing 

limited relief from the requirements of sections 

72(t)(4), 401(a)(9), and 4974 of the Code with 

respect to retirement plans that hold Auction Rate 

Securities. The Department has also been informed 

by the Service that if Auction Rate Securities are 

purchased from a Plan in a transaction described in 

Sections I and II at a price that exceeds the fair 

market value of those securities, then the excess 

value would be treated as a contribution for 

purposes of applying applicable contribution and 

deduction limits under sections 219, 404, 408, and 

415 of the Code. 

5The Department notes that the Act’s general 

standards of fiduciary conduct also would apply to 

the transactions described herein. In this regard, 

section 404 of the Act requires, among other things, 

that a fiduciary discharge his duties respecting a 

plan solely in the interest of the plan’s participants 

and beneficiaries and in a prudent manner. 

Accordingly, a Plan fiduciary must act prudently 

with respect to, among other things: (1) The 

decision to exchange an Auction Rate Security for 

a Delivered Security; and (2) the negotiation of the 

terms of such exchange (or a cash sale or loan 

described above), including the pricing of such 

securities. The Department further emphasizes that 

it expects Plan fiduciaries, prior to entering into any 

of the transactions, to fully understand the risks 

associated with these types of transactions 

following disclosure by UBS of all relevant 

information. 

effective February 1, 2008, to the 

following transactions, if the conditions 

set forth in Section III have been met: 

(a) The sale or exchange of an Auction 

Rate Security by a Title II Only Plan (as 

defined in Section IV(i)) to the 

Beneficial Owner (as defined in Section 

IV(c)) of such Plan; or 

(b) A lending of money or other 

extension of credit to a Title II Only 

Plan in connection with the holding of 

an Auction Rate Security by the Title II 

Only Plan, from: (1) UBS; (2) an 

Introducing Broker; or (3) a Clearing 

Broker; where the loan is: (i) repaid in 

accordance with its terms and; (ii) 

guaranteed by the Beneficial Owner. 

Section III. Conditions 

(a) UBS acted as a broker or dealer, 

non-bank custodian, or fiduciary in 

connection with the acquisition or 

holding of the Auction Rate Security 

that is the subject of the transaction; 

(b) For transactions involving a Plan 

(including a Title II Only Plan) not 

sponsored by UBS for its own 

employees, the decision to enter into the 

transaction is made by a Plan fiduciary 

who is independent (as defined in 

Section IV(e)). For transactions 

involving a Plan sponsored by UBS for 

its own employees, UBS may direct 

such Plan to engage in a transaction 

described in Section I if all of the other 

conditions of this Section III have been 

met. Notwithstanding the foregoing, an 

employee of UBS who is the Beneficial 

Owner of a Title II Only Plan may direct 

such Plan to engage in a transaction 

described in Section II, if all of the other 

conditions of this Section III have been 

met; 

(c) The last auction for the Auction 

Rate Security was unsuccessful; 

(d) The Plan does not waive any rights 

or claims in connection with the loan or 

sale as a condition of engaging in the 

above-described transaction; 

(e) The Plan does not pay any fees or 

commissions in connection with the 

transaction; 

(f) The transaction is not part of an 

arrangement, agreement or 

understanding designed to benefit a 

party in interest; 

(g) With respect to any sale described 

in Section I(a) or Section II(a): 

(1) The sale is for no consideration 

other than cash payment against prompt 

delivery of the Auction Rate Security; 

and 

(2) For purposes of the sale, the 

Auction Rate Security is valued at par, 

plus any accrued but unpaid interest;4

(h) With respect to an in-kind 

exchange described in Section I(a) or 

Section II(a), the exchange involves the 

transfer by a Plan of an Auction Rate 

Security in return for a Delivered 

Security, as such term is defined in 

Section IV(j), where: 

(1) The exchange is unconditional; 

(2) For purposes of the exchange, the 

Auction Rate Security is valued at par, 

plus any accrued but unpaid interest; 

(3) The Delivered Security is valued at 

fair market value, as determined at the 

time of the in-kind exchange by a third 

party pricing service or other objective 

source; 

(4) The Delivered Security is 

appropriate for the Plan and is a 

security that the Plan is otherwise 

permitted to hold under applicable 

law; 5 and 

(5) The total value of the Auction Rate 

Security (i.e., par plus any accrued but 

unpaid interest) is equal to the fair 

market value of the Delivered Security; 

(i) With respect to a loan described in 

Sections I(b) or II(b): 

(1) The loan is documented in a 

written agreement that contains all of 

the material terms of the loan, including 

the consequences of default; 

(2) The Plan does not pay an interest 

rate that exceeds one of the following 

three rates as of the commencement of 

the loan: 

(A) The coupon rate for the Auction 

Rate Security; 

(B) The Federal Funds Rate; or 

(C) The Prime Rate; 

(3) The loan is unsecured; and 

(4) The amount of the loan is not more 

than the total par value of the Auction 

Rate Securities held by the Plan. 

Section IV. Definitions 

(a) The term ‘‘affiliate’’ means: Any 

person directly or indirectly, through 

one or more intermediaries, controlling, 

controlled by, or under common control 

with such other person; 

(b) The term ‘‘Auction Rate Security’’ 

or ‘‘ARS’’ means a security: 

(1) That is either a debt instrument 

(generally with a long-term nominal 

maturity) or preferred stock; and 

(2) With an interest rate or dividend 

that is reset at specific intervals through 

a Dutch auction process; 

(c) The term ‘‘Beneficial Owner’’ 

means: The individual for whose benefit 

the Title II Only Plan is established and 

includes a relative or family trust with 

respect to such individual; 

(d) The term ‘‘Clearing Broker’’ means: 

A member of a securities exchange that 

acts as a liaison between an investor and 

a clearing corporation and that helps to 

ensure that a trade is settled 

appropriately, that the transaction is 

successfully completed and that is 

responsible for maintaining the paper 

work associated with the clearing and 

executing of a transaction; 

(e) The term ‘‘independent’’ means a 

person who is: (1) Not UBS or an 

affiliate; and (2) not a relative (as 

defined in section 3(15) of the Act) of 

the party engaging in the transaction; 

(f) The term ‘‘Introducing Broker’’ 

means: A registered broker that is able 

to perform all the functions of a broker 

except for the ability to accept money, 

securities, or property from a customer; 

(g) The term ‘‘Sponsor’’ means: A plan 

sponsor as described in section 3(16)(B) 

of the Act and any affiliates; 

(h) The term ‘‘Plan’’ means: Any plan 

described in section 3(3) of the Act and/ 

or section 4975(e)(1) of the Code; 

(i) The term ‘‘Title II Only Plan’’ 

means: Any plan described in section 

4975(e)(1) of the Code which is not an 

employee benefit plan covered by Title 

I of the Act; and 

(j) The term ‘‘Delivered Security’’ 

means a security that is: (1) Listed on a 

national securities exchange (excluding 

OTC Bulletin Board-eligible securities 

and Pink Sheets-quoted securities); (2) a 

U.S. Treasury obligation; (3) a fixed 

income security that has a rating at the 

time of the exchange that is in one of the 

two highest generic rating categories 

from an independent nationally 

recognized statistical rating organization 

(e.g., a highly rated municipal bond or 

a highly rated corporate bond); or (4) a 

certificate of deposit insured by the 

Federal Deposit Insurance Corporation. 

Notwithstanding the above, the term 

‘‘Delivered Security’’ shall not include 

any Auction Rate Security, or any 


wwoods2 on DSK1DXX6B1PROD with NOTICES_PART 1
22852 Federal Register / Vol. 75, No. 83 / Friday, April 30, 2010 / Notices 

related Auction Rate Security, including 

derivatives or securities materially 

comprised of Auction Rate Securities or 

any illiquid securities. 

Effective Date: This exemption is 

effective as of February 1, 2008. 

For a more complete statement of the 

facts and representations supporting the 

Department’s decision to grant this 

exemption, refer to the notice of 

proposed exemption published on 

January 19, 2010 at 75 FR 3071. 

For Further Information Contact: 

Brian Shiker of the Department, 

telephone (202) 693–8552. (This is not 

a toll-free number.) 

Subaru of America, Inc. (Subaru), 

Located in Cherry Hill, New Jersey. 

[Prohibited Transaction Exemption 

2010–15; Exemption Application No. 

D–11531.] 

Exemption 

The restrictions of sections 406(a) and 

(b) of the Act shall not apply to the 

reinsurance of risks and the receipt of 

premiums therefrom by Pleiades 

Insurance Company, Ltd. (PIC) in 

connection with an insurance contract 

sold by Minnesota Life Insurance 

Company (MN Life) or any successor 

insurance company to MN Life which is 

unrelated to Subaru, to provide groupterm life insurance to employees of 

Subaru under the Subaru of America, 

Inc. Welfare Benefit Plan (the Plan), 

provided the following conditions are 

met: 

(a) PIC— 

(1) Is a party in interest with respect 

to the Plan by reason of a stock or 

partnership affiliation with Subaru that 

is described in section 3(14)(E) or (G) of 

the Act, 

(2) Is licensed to sell insurance or 

conduct reinsurance operations in at 

least one State as defined in section 

3(10) of the Act, 

(3) Has a U.S. branch, the Pleiades 

Insurance Company Ltd. (U.S. Branch), 

which has obtained a Certificate of 

Authority from the Insurance 

Commissioner of its domiciliary State 

which has neither been revoked nor 

suspended, 

(4)(A) Has undergone and shall 

continue to undergo an examination by 

an independent certified public 

accountant for its last completed taxable 

year immediately prior to the taxable 

year of the reinsurance transaction; or 

(B) Has undergone a financial 

examination (within the meaning of the 

law of its domiciliary State, the District 

of Columbia) by the Insurance 

Commissioner of the District of 

Columbia within 5 years prior to the 

end of the year preceding the year in 

which the reinsurance transaction 

occurred, and 

(5) Is licensed to conduct reinsurance 

transactions by a State whose law 

requires that an actuarial review of 

reserves be conducted annually by an 

independent firm of actuaries and 

reported to the appropriate regulatory 

authority; 

(b) The Plan pays no more than 

adequate consideration for the 

insurance contracts; 

(c) In subsequent years, the formula 

used to calculate premiums by MN Life 

or any successor insurer will be similar 

to formulae used by other insurers 

providing comparable coverage under 

similar programs. Furthermore, the 

premium charge calculated in 

accordance with the formula will be 

reasonable and will be comparable to 

the premium charged by the insurer and 

its competitors with the same or a better 

rating providing the same coverage 

under comparable programs; 

(d) The Plan only contracts with 

insurers with a rating of A or better from 

A.M. Best Company. The reinsurance 

arrangement between the insurer and 

PIC will be indemnity insurance only, 

i.e., the insurer will not be relieved of 

liability to the Plan should PIC be 

unable or unwilling to cover any 

liability arising from the reinsurance 

arrangement; 

(e) No commissions are paid with 

respect to the reinsurance of such 

contracts; and 

(f) For each taxable year of PIC, the 

gross premiums and annuity 

considerations received in that taxable 

year by PIC for life and health insurance 

or annuity contracts for all employee 

benefit plans (and their employers) with 

respect to which PIC is a party in 

interest by reason of a relationship to 

such employer described in section 

3(14)(E) or (G) of the Act does not 

exceed 50% of the gross premiums and 

annuity considerations received for all 

lines of insurance (whether direct 

insurance or reinsurance) in that taxable 

year by PIC. For purposes of this 

condition (f): 

(1) The term ‘‘gross premiums and 

annuity considerations received’’ means 

as to the numerator the total of 

premiums and annuity considerations 

received, both for the subject 

reinsurance transactions as well as for 

any direct sale or other reinsurance of 

life insurance, health insurance or 

annuity contracts to such plans (and 

their employers) by PIC. This total is to 

be reduced (in both the numerator and 

the denominator of the fraction) by 

experience refunds paid or credited in 

that taxable year by PIC. 

(2) All premium and annuity 

considerations written by PIC for plans 

which it alone maintains are to be 

excluded from both the numerator and 

the denominator of the fraction. 

For a more complete statement of the 

facts and representations supporting the 

Department’s decision to grant this 

exemption, refer to the notice of 

proposed exemption published on 

February 23, 2010 at 75 FR 8132. 

For Further Information Contact: Gary 

H. Lefkowitz of the Department, 

telephone (202) 693–8546. (This is not 

a toll-free number.) 

General Information 

The attention of interested persons is 

directed to the following: 

(1) The fact that a transaction is the 

subject of an exemption under section 

408(a) of the Act and/or section 

4975(c)(2) of the Code does not relieve 

a fiduciary or other party in interest or 

disqualified person from certain other 

provisions to which the exemption does 

not apply and the general fiduciary 

responsibility provisions of section 404 

of the Act, which among other things 

require a fiduciary to discharge his 

duties respecting the plan solely in the 

interest of the participants and 

beneficiaries of the plan and in a 

prudent fashion in accordance with 

section 404(a)(1)(B) of the Act; nor does 

it affect the requirement of section 

401(a) of the Code that the plan must 

operate for the exclusive benefit of the 

employees of the employer maintaining 

the plan and their beneficiaries; 

(2) This exemption is supplemental to 

and not in derogation of, any other 

provisions of the Act and/or the Code, 

including statutory or administrative 

exemptions and transactional rules. 

Furthermore, the fact that a transaction 

is subject to an administrative or 

statutory exemption is not dispositive of 

whether the transaction is in fact a 

prohibited transaction; and 

(3) The availability of this exemption 

is subject to the express condition that 

the material facts and representations 

contained in the application accurately 

describes all material terms of the 

transaction which is the subject of the 

exemption. 

Signed at Washington, DC, this 26th day of 

April 2010. 

Ivan Strasfeld, 

Director of Exemption Determinations, 

Employee Benefits Security Administration, 

U.S. Department of Labor. 

[FR Doc. 2010–10064 Filed 4–29–10; 8:45 am] 

BILLING CODE 4510–29–P 


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